Hyderabad emerges as key destination for office leasing, driven by tech operators 

Office space leasing in Hyderabad soared to 2.0 million square feet (sq. ft.) between January and March 2024.

Hyderabad: The office real estate sector in Hyderabad experienced a substantial uptick in leasing activity during the first quarter of 2024, as reported by CBRE South Asia Pvt. Ltd, a prominent real estate consulting firm in India.

According to the latest findings from CBRE’s ‘CBRE India Office Figures Q1 2024’ report, office space leasing in Hyderabad soared to 2.0 million square feet (sq. ft.) between January and March 2024, marking a remarkable 46 per cent year-on-year increase from the corresponding period in 2023.

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This surge in leasing activity signifies a robust demand for commercial spaces in the city.

Key sectors that fueled this absorption included technology, accounting for 43 per cent of the total uptake, followed by life sciences at 24 per cent, and flexible space operators at 18 per cent.

According to the report, notable transactions recorded in the city during this period include HCL leasing 330,000 square feet in Commerzone Wing 2, Table Space leasing 196,400 square feet in Mindspace West – Building No. 4A + 4B, and Alstom leasing 140,000 square feet in Laxmi Infobahn – T6 (Phase 1).

The report highlights that small-sized deals (less than 50,000 square feet) were prominent in driving office space take-up during Jan-Mar ’24. The IT segment notably accounted for 70 per cent of the total absorption, while the supply for the same segment stood at 34 per cent.

On a broader scale, the office sector in India witnessed a gross absorption of 14.4 million square feet during Jan-Mar ’24 across nine major cities, representing a marginal decline of 3 per cent year-on-year.

Development completions totaled about 9.8 million square feet during the same period, decreasing by 10 per cent year-on-year, with the non-SEZ segment dominating the completions.

Among Indian cities, Bangalore led in office leasing activity, followed by Delhi NCR and Hyderabad, collectively contributing to 65 per cent of the total leasing activity. The quarter saw significant expansion initiatives by corporates across these cities.

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “In 2023, the Indian economy continued its growth journey despite rising interest rates and global macroeconomic challenges. This trend of Indian resilience is expected to persist in 2024 with a continued focus on infrastructure development, private investments, and ongoing reforms. The office sector witnessed meaningful gains in 2023, enhanced by a resurgence in occupiers’ sentiments and pent-up demand after a rise in return-to-offices. During 2024, occupiers would prioritise high-quality office space as they continue to facilitate portfolio expansion and consolidation.”

Looking ahead, the report forecasts continued demand from Global Capability Centres (GCCs) as a prime driver of office space leasing in India. It also anticipates a robust pipeline of high-quality office spaces entering the market.